If you’re anything like me (and you’re blogging because you’re a writer and not a math person and certainly not a financial aficionado and – full disclosure – you failed 7th grade pre-Algebra) you get super overwhelmed at the flinging of numbers and all things calculator oriented. But if you’re trying to save money for a down payment toward your first home, your second home – or maybe you’re just trying to live more affordably, you will want to tune in.
Kali Hawlk via Trulia shares the secrets of the 50-30-20 budgeting formula and why it works to add to savings.
Here’s how it works:
- 50% of your income should go to your living expenses and your essentials, such as your house payment, utilities, transportation, and grocery bills.
- 20% of your income should go to savings, investments, and any debts you have (credit cards or loan payments).
- 30% of your income should go toward flexible spending, which is whatever you want it to be.
For more on the 50-20-30 budgeting formula, check out Hawlk’s blog here.